Earley corporation issued perpetual preferred stock with an


Earley Corporation issued perpetual preferred stock with an 8% annual dividend. The stock current yields 7%, and its par value is $100

a. What is the stock's value?

b. Suppose interest rates rise and pull the preferred stock's yield up to 9%. What is its new market value?

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Finance Basics: Earley corporation issued perpetual preferred stock with an
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